In the run up to Christmas, maximising profits is the number one priority for every organisation in the retail sector and retailers will be looking for any technologies and processes that may possibly give them an edge and allow them to begin 2014 on a positive note. The key to marketing around this period is data and there are no organisations so advanced in the practice of using data on consumer habits to increase sales, than supermarkets.
Social media has come to the fore in recent years as a popular method to engage consumers, but the omni-channel habits and always-on mentality of today’s consumer require retailers to cover more and more channels while not forgetting about those channels that have been used for years – one of which being email.
When marketing to consumers over email, the key is relevance as it has the most chance of driving action. However, with the amount of consumer data on purchasing habits and online interactions, relevance is often not enough anymore, instead personalisation is required to gain the desired response and return on investment.
The importance of the single customer view
By placing the customer instead of transaction in the centre of the “universe,” this allows businesses to understand and analyse customers by axis such as behaviour, characteristics and data mining scores along with additional reference and external data. Challenges addressed by developing a single customer view include disparate data and siloed data ownership, while it will help retailers with customer retention and loyalty and maximising customer value.
Supermarkets (specifically Tesco) were some of the first organisations to adopt this approach to data and marketing, with the vast amount of customer data collected through their loyalty card schemes allowing highly personalised discounts and offers to be delivered through a variety of channels. The Tesco Clubcard is the original scheme with reportedly now 15 million members in the UK, but many other retailers have followed the lead of Tesco and other supermarkets. According to TNS, around 85 per cent of UK households now have at least one loyalty card.
Marketing outside of loyalty schemes
Given the extensive nature of customer data and loyalty card schemes today, IMGROUP conducted a small experiment to investigate how supermarkets target customers, through email marketing, that they do not hold purchasing or loyalty card data on. The results really demonstrate the value placed on data – online accounts were signed up for with five major supermarkets (Tesco, Sainsbury’s, Waitrose, Morrisons and Asda) with email marketing messages monitored over a six week period running up to Christmas, from late October to early December.
Aside from welcome emails, the overall results saw that 28 emails were delivered in the six week period, but they varied substantially in frequency and content from one supermarket to another:
• Waitrose – 12 emails focusing on offers around wine, flowers & garden, and hampers
• Asda – nine emails focusing on Christmas food and wine, delivery discounts and the Asda app
• Morrisons – four emails focusing on Christmas and offers
• Sainbury’s – three emails focusing on discounts on wine and home
• Tesco – No emails
These findings suggest that without customer data, supermarkets will focus on seasonal marketing or on messages that will likely appeal to their average customer. However, more interestingly it shows the value put on personalised communications by some of the organisations to the point where the owners of the two biggest loyalty card schemes (Tesco’s Clubcard and Sainbury’s Nectar Card), will actually refrain from targeting customers who they don’t have data on. In the case of Tesco, no emails were sent in the six week period, suggesting that marketing messages are solely based on detailed customer purchasing data.
Following suit
The bottom line is that technology has a key role to play in helping retailers address the market challenges they face as well as enabling them to make the most of opportunities. As mentioned, many retailers have followed the supermarkets lead in the loyalty scheme department, but this will not be an appropriate approach for all retailers. So, what is the answer for these retailers to achieve greater personalisation and returns on marketing investment?
The answer is Business Intelligence (BI) – the process of transforming data into insight that enables the whole business to make decisions faster and with greater confidence. The ability to capture, interrogate and share customer information enables better understanding of customers will give retailers the ability to better exploit new channels to new markets and provide a greater degree of personalisation when it comes to their marketing messages.
By Martin Philpott, Head of Retail at IMGROUP.
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